Comparing Orchid Island Capital (NYSE:ORC) and Equinix (NASDAQ:EQIX)

Orchid Island Capital (NYSE:ORC) and Equinix (NASDAQ:EQIX) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.

Analyst Ratings

This is a summary of current ratings and price targets for Orchid Island Capital and Equinix, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orchid Island Capital	0	1	1	0	2.50
Equinix	0	5	11	0	2.69

Orchid Island Capital presently has a consensus target price of $9.50, suggesting a potential upside of 14.25%. Equinix has a consensus target price of $883.71, suggesting a potential upside of 1.40%. Given Orchid Island Capital’s higher possible upside, equities research analysts clearly believe Orchid Island Capital is more favorable than Equinix.

Earnings and Valuation

This table compares Orchid Island Capital and Equinix”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orchid Island Capital	$177.57 million	3.34	-$39.23 million	($0.53)	-15.69
Equinix	$8.19 billion	10.11	$969.18 million	$9.97	87.42

Equinix has higher revenue and earnings than Orchid Island Capital. Orchid Island Capital is trading at a lower price-to-earnings ratio than Equinix, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Orchid Island Capital and Equinix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orchid Island Capital	N/A	-6.36%	-0.68%
Equinix	12.24%	8.46%	3.21%

Volatility & Risk

Orchid Island Capital has a beta of 1.85, meaning that its stock price is 85% more volatile than the S&P 500. Comparatively, Equinix has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500.

Insider and Institutional Ownership

32.7% of Orchid Island Capital shares are owned by institutional investors. Comparatively, 94.9% of Equinix shares are owned by institutional investors. 0.6% of Orchid Island Capital shares are owned by company insiders. Comparatively, 0.3% of Equinix shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Orchid Island Capital pays an annual dividend of $1.44 per share and has a dividend yield of 17.3%. Equinix pays an annual dividend of $17.04 per share and has a dividend yield of 2.0%. Orchid Island Capital pays out -271.7% of its earnings in the form of a dividend. Equinix pays out 170.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Orchid Island Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Equinix beats Orchid Island Capital on 11 of the 16 factors compared between the two stocks.

About Orchid Island Capital

Orchid Island Capital, Inc., a specialty finance company, invests in residential mortgage-backed securities (RMBS) in the United States. The company's RMBS is backed by single-family residential mortgage loans, referred as Agency RMBS. Its portfolio includes traditional pass-through Agency RMBS, such as mortgage pass through certificates and collateralized mortgage obligations; and structured Agency RMBS comprising interest only securities, inverse interest only securities, and principal only securities. The company has elected to be taxed as a real estate investment trust (REIT) for the United States federal income tax purposes. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to stockholders, if it annually distributes dividends equal to at least 90% of its REIT taxable income to its stockholders. Orchid Island Capital, Inc. was incorporated in 2010 and is headquartered in Vero Beach, Florida.

About Equinix

Equinix (Nasdaq: EQIX) is the world's digital infrastructure company . Digital leaders harness Equinix's trusted platform to bring together and interconnect foundational infrastructure at software speed. Equinix enables organizations to access all the right places, partners and possibilities to scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value, while supporting their sustainability goals.